Exposure of F9 teratocarcinoma cells to tetinoic acid (RA) induces differentiation to an endoderm cell type. An early event of RA action to promote differentiation of F9 cells is to sensitize these cells to cyclic AMP by elevating cyclic AMP-dependent protein kinase (cAMP-PK) activities. Recent studies have determined changes in the activity and subcellular distribution of cAMP-PK in response to RA treatment of three different embryonal carcinoma (EC) cell lines. Retinoid-induced differentiation of F9 and PCC4 cells gives rise to a parietal endoderm cell type, whereas, exposure of PC-13 cells to RA induces differentiation to visceral endoerm. In every case the levels of cAMP-PK activity, and of the RII regulatory subunit, were increased with RA treatment of the undifferentiated stem cell populations. However, with exposure to RA the amount of the RI regulatory subunit was increased in F9 and PCC4 cells, which differentiate to parietal endoderm, whereas the level of RI was decreased in PC13 cells which differentiate into visceral endoderm. RA treatment of F9 cells also causes a time-dependent (2-5 days) increase in cytosolic protein kinase C (PK-C) activity. With partially purified rat brain enzyme, RA was shown to inhibit diacylglycerol, or phorbol ester, stimulated PK-C activity. In the absence of added lipids, however, RA stimulated PK-C activity. Conceivably, RA might antagonize the actins of diacylglycerol or tumor promoters on PK-C. EC cells have been shown to be a useful model to study early events of embryogenesis. Previously we established that rat insulin-like growth factor-II (IGF-II) can support the growth and differentiation of F9 cells. Results indicates that EC-derived endoderm cells produce an IGF-like activity. This factor competes for [I125) IGF-II binding to membranes. This IGF-like factor is biologically active as it stimulates (H3) thymidine incorporation into chick embryo fibroblasts. Biochemical and immunological data indicate that this factor is closely related, if not identical, to IGF-II. These findings suggest that IGF-II produced by endoderm cells, particularily visceral endoderm, may serve as an early embryonic growth factor.